The case involves a trademark dispute over the marks “Udta Panchhi” and “Panchhi Chaap,” both used in connection with chewing tobacco. The central issues revolved around deceptive similarity, prior use, delay in filing for injunction, and the doctrine of honest concurrent use under the Trade and Merchandise Marks Act, 1958.

Background: The dispute arose between Ansul Industries (appellant) and Shiva Tobacco Company (respondent), both engaged in manufacturing and selling chewing tobacco. The respondent claimed to be the prior user and registered proprietor of the trademark “Panchhi Chaap” since 1973, while the appellant adopted the mark “Udta Panchhi” in 1982. The trial court granted an injunction in favor of the respondent, restraining the appellant from using the mark "Panchhi." This order was challenged by the appellant.

• Brief Facts of the Case:
  • Respondent's Claim: Shiva Tobacco Company began using “Panchhi Chaap” in 1973 and obtained trademark registration in 1974.
  • Appellant's Claim: Ansul Industries adopted “Udta Panchhi” in 1982 through its predecessor, Bansal Tobacco Store, and applied for registration in 1990.
  • Trial Court's Decision: The trial court restrained the appellant from using the mark, emphasizing the respondent's prior use and registration.
  • Appeal: Ansul Industries appealed, arguing delay in filing the suit and claiming honest concurrent use.
     
• Issues Involved:
  • Are the marks “Udta Panchhi” and “Panchhi Chaap” deceptively similar?
  • Can an injunction be denied on grounds of delay and latches?
  • Does the appellant qualify as an honest concurrent user under Section 12(3) of the Trade and Merchandise Marks Act, 1958?
  • Is the respondent still the valid owner of the registered trademark?
  • Has the respondent concealed material facts or committed fraud?
     
• Submissions of the Parties:
  • Appellant (Ansul Industries):
    • Claimed that “Udta Panchhi” was adopted honestly and independently.
    • Argued that the respondent's delay of 15 years in filing the suit indicated acquiescence.
    • Asserted that their sales were higher, suggesting consumer preference for their product.
    • Cited the principle of reverse confusion, where a stronger market presence of the junior user could lead to consumer association with their brand.
       
  • Respondent (Shiva Tobacco Company):
    • Emphasized prior use and registration of “Panchhi Chaap” since 1973.
    • Argued that delay was not a valid defense in cases of trademark infringement.
    • Claimed that the appellant's adoption of “Udta Panchhi” was dishonest and aimed at exploiting their goodwill.
       
• Reasoning and Analysis by the Court:
  • Deceptive Similarity: The Court applied the visual and phonetic similarity test, emphasizing that the word “Panchhi” was the dominant feature of both marks. It held that the use of the word “Panchhi” along with the image of a flying bird created a likelihood of confusion, especially among semi-literate and illiterate consumers of chewing tobacco.
  • Delay and Latches: The Court noted that delay alone does not defeat the right to injunction unless accompanied by acquiescence or prejudice to the defendant. It observed that the respondent had consistently objected to the appellant's use of the mark and engaged in legal proceedings, negating any inference of acquiescence.
  • Dishonesty in Adoption: The Court highlighted that honest concurrent use requires proof of good faith and lack of knowledge of the prior mark at the time of adoption. It found the appellant’s adoption of “Udta Panchhi” in 1982 to be dishonest, as they were likely aware of the respondent’s established mark “Panchhi Chaap.”
  • Ownership of Trademark: The Court rejected the appellant's claim that the respondent was no longer the owner of the trademark due to changes in the partnership firm. It held that the reconstituted partnership retained ownership of the registered mark.
  • Fraud and Concealment: The Court found no evidence of fraud or concealment by the respondent. It concluded that any omission in the plaint did not materially affect the respondent’s case or mislead the Court.

Decision:
The Delhi High Court dismissed the appeal, upholding the trial court’s order of injunction against Ansul Industries. The Court ruled that the respondent, as the prior user and registered proprietor of the mark “Panchhi Chaap,” was entitled to protection under trademark law.

Conclusion:
This judgment reaffirms the importance of prior use and registration in trademark disputes. It underscores that:Delay does not bar injunction in cases of infringement unless accompanied by acquiescence.Honest concurrent use requires proof of good faith at the time of adoption.Courts prioritize consumer protection against confusion and deception, especially for goods marketed to vulnerable populations.The case serves as a significant precedent in Indian trademark law, particularly on the issues of deceptive similarity, delay, and honest concurrent use.

Case Title: Ansul Industries Vs. Shiva Tobacco Company
Date of Order: January 16, 2007
Case Number: FAO No. 228/2005
Citation: MANU/DE/9852/2007, (2007) ILR 1 Delhi 409, 2007 (34) PTC 392 (Del)
Name of the Court: High Court of Delhi
Bench: Hon'ble Mr. Justice Sanjiv Khanna

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: [email protected], Ph no: 9990389539